CalHFA Down Payment Assistance: Cover Your Down Payment with a State Loan
California's Housing Finance Agency provides deferred-payment junior loans that cover your 3–3.5% down payment. Dan Ardis is a CalHFA-approved lender in Bakersfield.
What Is CalHFA and How Does It Work?
The California Housing Finance Agency (CalHFA) is a state agency that creates and administers affordable housing programs for California residents. Its most used mortgage product for first-time buyers is the MyHome Assistance Program: a deferred-payment second mortgage that covers the down payment requirement on an FHA or conventional first loan.
The core mechanics: CalHFA provides a junior loan equal to 3.5% of the purchase price on an FHA-backed first mortgage, or 3% on a conventional first. You use that money for your down payment. You make no monthly payments on the junior loan. When you eventually sell the home, refinance, or pay off the first mortgage, the junior loan balance plus accrued simple interest is repaid in full. Until that event, the down payment assistance costs you nothing out of pocket each month.
This means a qualified Bakersfield buyer purchasing a $350,000 home with a CalHFA FHA structure needs approximately $12,250 for the down payment, which is covered entirely by the MyHome loan. The buyer still needs funds for closing costs, though seller concessions can offset those as well.
CalHFA loans can only be originated by approved lenders. Dan Ardis holds a CalHFA lender approval and has structured CalHFA transactions for Bakersfield buyers across multiple program years. Not every mortgage broker or bank is CalHFA-approved, which is a meaningful filter when evaluating who can actually deliver this program.
CalHFA Program Highlights
MyHome Assistance Program: The Details
MyHome is CalHFA's flagship down payment assistance product and the one most Bakersfield buyers use. It is structured as a deferred-payment junior lien, which means it sits behind your primary mortgage on title and requires no monthly payment. Here is what you need to understand before applying.
How the Deferred Structure Works
The MyHome loan accrues simple interest at a rate set by CalHFA at origination. Simple interest means the interest does not compound. On a $12,250 MyHome loan at, for example, 3% simple interest, you would owe $12,250 plus $367.50 for each year the loan is outstanding, rather than the compounding interest that characterizes most mortgage debt. The total repayment is knowable at any point: principal plus (rate × principal × years held). No surprises.
Repayment Triggers
The MyHome loan becomes due and payable in full when any of the following occur: you sell the property, you refinance the first mortgage, you pay off the first mortgage in full, or the property is no longer your primary residence. There is no prepayment penalty — you can pay off the junior loan at any time without penalty. Many CalHFA borrowers refinance their first mortgage into a lower rate a few years after purchase and pay off the MyHome balance at that time using accumulated equity.
What It Does and Doesn't Cover
MyHome covers the down payment only, not closing costs. Closing costs on a Kern County purchase typically run 1.5–3% of the purchase price. These can be covered by seller concessions (FHA allows up to 6% seller contributions), lender credits, or the buyer's own funds. Dan structures CalHFA transactions to maximize seller contribution requests so buyers enter with the least possible cash out of pocket. In well-structured deals, some Bakersfield buyers close with less than $5,000 of their own money after combining CalHFA DPA with seller concessions.
Program Requirements in Detail
To qualify for MyHome, you must: be a first-time homebuyer (no primary residence ownership in the past three years), occupy the property as your primary residence, meet the CalHFA income limit for your household size and county, have a minimum 640 credit score, complete a CalHFA-approved homebuyer education course, and use a CalHFA-approved lender. The property must be a single-family residence, approved condo, or planned unit development located in California. The purchase price cannot exceed CalHFA's posted limit for the county.
Dream For All availability: This program operates through limited funding rounds and is not always open for new applications. Dan will confirm whether Dream For All has open enrollment at the time of your application.
Dream For All: Shared Appreciation Assistance
Dream For All is a more aggressive version of CalHFA assistance that provides up to 20% of the purchase price as a down payment loan. The tradeoff is a shared appreciation structure: CalHFA receives the same percentage of the home's future appreciation that it contributed at purchase.
Example: If CalHFA provided 20% of a $350,000 purchase price ($70,000), it holds a 20% share of appreciation. If you sell ten years later for $500,000, the $150,000 gain is split 80% to you ($120,000) and 20% to CalHFA ($30,000), plus your original $70,000 is repaid. You still benefit from 80% of the appreciation — but you gave up 20% of the upside to avoid needing a $70,000 down payment today.
For buyers with strong income but limited savings, Dream For All can be a meaningful accelerant. The absence of a large down payment means entering the market sooner, which in Bakersfield's appreciating market has generally outperformed waiting and saving. The shared appreciation cost is real but calculable. Dan models the Dream For All scenario against the alternative of renting while saving so buyers can make an informed comparison.
CalHFA Pros & Cons
Pros
- Covers the full down payment with no monthly cost
- No out-of-pocket down payment needed
- Simple interest accrual (not compound)
- Can be combined with seller concessions to minimize cash to close
- Available on both FHA and conventional first mortgages
- No prepayment penalty on the junior loan
- Approved lender network ensures proper structuring
Cons
- Not a grant — the loan must be repaid at sale or refi
- 640 minimum credit score (higher than standalone FHA at 580)
- Income limits cap eligibility for higher earners
- Homebuyer education course required before closing
- Only available through CalHFA-approved lenders
- Dream For All has limited funding and waitlists
- Purchase price caps apply (varies by county)
Who Qualifies for CalHFA in Kern County
First-Time Homebuyer Status
You cannot have owned and occupied a primary residence in the three years prior to closing. Co-borrowers must also meet this requirement. Owning investment property does not disqualify you as long as you did not live in it as a primary residence.
Income Within Limits
Kern County income limits for CalHFA programs vary from approximately $155,000 for smaller households to $171,000+ for larger ones, depending on the specific program. Total household income from all borrowers is counted. Dan runs the income calculation at pre-approval to confirm eligibility.
Credit Score 640 or Higher
The 640 floor is firm for most CalHFA programs. Scores between 580–639 that qualify for standalone FHA will not qualify for the CalHFA layered structure. If your score is 630, a targeted credit improvement plan of 30–60 days can often bridge the gap.
Primary Residence Occupancy
You must intend to occupy the property as your primary residence. CalHFA programs are not available for investment properties, vacation homes, or properties you do not plan to live in immediately after closing.
Property Within Purchase Price Limits
The purchase price cannot exceed the CalHFA limit for the county and program. Kern County limits are generally in the $600,000–$660,000 range, which covers the large majority of Bakersfield purchase transactions. Dan confirms the current limit before you make an offer.
Homebuyer Education Completion
You must complete a CalHFA-approved homebuyer education course and obtain a certificate before closing. The course can be completed online through eHome America or Framework. Plan for 6–8 hours of coursework. Dan recommends completing this early in the process to avoid any closing delays.
Dan's Take on CalHFA
CalHFA is the most underutilized tool available to Bakersfield first-time buyers. The most common reason people don't use it is that they don't know it exists, or they assume the income limits are too low for them. Most Kern County buyers earning under $155,000 qualify, and that covers a significant portion of first-time buyers who think they need to save for years before buying.
The second most common barrier is the credit score floor. CalHFA requires 640 versus standalone FHA's 580. I work with buyers at 620–630 regularly to get them to 640 in 30–60 days through targeted credit moves before we submit the application. The difference between 630 and 640 is not a wall. It's a short road with a known endpoint.
The MyHome loan is not free money, and I am always transparent about that. You will repay it. But the question is whether using it now, buying a home, and building equity for five years is better than paying rent for those same five years while saving a down payment. In Bakersfield, with the median home appreciation we have seen, the answer is almost always yes.
Dan Ardis, NMLS# 1412272 | CalHFA-Approved Lender | Barrett Financial Group
CalHFA Frequently Asked Questions
CalHFA Resources and Related Programs
Ready to Buy With CalHFA Down Payment Assistance?
Dan is a CalHFA-approved lender. Apply online in minutes or call (661) 342-9381 to confirm your eligibility and get pre-approved.